Detroit— While Kwame Kilpatrick braced for one of the longest prison sentences ever handed down to a corrupt politician Thursday, a company caught up in the ex-mayor’s racketeering scandal staked a claim to millions in restitution that could be awarded to the bankrupt city.
Construction company Walbridge wants as much as $5 million in restitution that prosecutors want awarded to Detroit because company officials argue the firm was victimized by Kilpatrick’s criminal scheme.
The company’s request surfaced Thursday after U.S. District Judge Nancy Edmunds sentenced Kilpatrick to 28 years in prison and castigated him for living “larger than life” on millions of dollars he stole after creating a “corrosive pay-to-play” system in city hall.
“I hope that the sentence that I’m about to impose will give that message, that we’re demanding accountability and transparency in our government,” Edmunds said. “That where there has been corruption, there will be no more. We are done.”
Yet Walbridge’s request signals a fight looms over who will receive millions seized by the government during the years-long federal probe, and the future earnings of Kilpatrick and Ferguson. Walbridge has filed a confidential restitution claim for up to $5 million, according to federal court records and a source familiar with the situation.
Federal prosecutors want Kilpatrick and Ferguson to pay $9.6 million in restitution to Detroit. Edmunds will determine the amount in coming weeks.
Walbridge officials wrote a victim impact letter recently that supported its claim for a piece of the restitution pie, according to a federal court filing. The Department of Justice refused to release the letter Thursday or discuss its contents.
U.S. Attorney Barbara McQuade would not specifically address the Walbridge restitution claim but said companies identified in the corruption indictment share some culpability.
“In some ways, they are all culpable because they participated in a pay-to-play culture,” McQuade said. “Some are victims because they lost business after they failed to play along.”
Walbridge was among a number of contractors which agreed to pay Ferguson in order to get business, but none were charged with crimes. Some contractors eventually testified but neither John Rakolta nor any Walbridge top executives testified during the five-month corruption trial. Walbridge is headed by Rakolta, who last year served as a national finance chairman for Republican presidential candidate Mitt Romney.
Legal expert Peter Henning has said the companies involved in the conspiracy were going to be needed by the FBI and the U.S. Attorney’s Office to help prosecute the case and that it’s “hard to distinguish” whether the payer of a bribe is also culpable of a crime.
The company played a prominent role in prosecutor’s attempts to label Kilpatrick and Ferguson as extortionists. Ferguson, aided by former Detroit Water and Sewerage boss Victor Mercado and Kilpatrick aide Derrick Miller, extorted Walbridge out of $5 million in work on a city project, according to testimony.
Walbridge agreed to work with Ferguson in one case, according to the indictment, but rejected calls to give his company a 35 percent cut on a $140 million project, instead offering 15 percent. At one point, according to the indictment, Kwame Kilpatrick met with a high-level Walbridge official at the Manoogian Mansion, asking Walbridge to “play fair” with Ferguson.
Separately, the FBI has investigated the Wayne County jail project for more than one year and subpoenaed contracts for its general contractor, Walbridge. County prosecutors also are investigating the project, which was beset by cost overruns that led to the project being halted. No charges have been filed in that investigation.
A Walbridge spokesman did not respond to messages seeking comment Thursday.
Federal prosecutors have insisted any restitution be paid to Detroit, not contractors.
“Some of those victimized also willingly participated in pay-to-play as a cost of doing business, thereby shutting out other contractors who did not want to participate in a tainted system like this,” prosecutors wrote in a court filing Monday. “However, it is beyond question that the city of Detroit and its citizens were the clear cut victims of the defendants’ crimes.”
The restitution could come from cash, homes, construction equipment and other assets seized during the City Hall corruption case and a separate bid-rigging case against Ferguson. The government has seized about $4 million and is continuing the search for money.
In March, Ferguson agreed to forfeit his interest in a Detroit home, $460,000 seized by the FBI during the City Hall corruption probe, 15 pieces of heavy equipment and a Riverfront Towers condominium.
The 28-year sentence is equal to the previous high set for a county commissioner in Cleveland, as Edmunds longed for an era of clean government to replace what plagued Kilpatrick’s Detroit.
Kilpatrick’s sentencing marked the pinnacle of an investigation that swept up more than 30 public officials and city vendors who won millions of dollars in contracts and city pension investments and it caps one of the bleakest chapters in a city now facing bankruptcy. Standing in khaki prison drab and slip-on shoes, Kilpatrick’s appearance courtroom demeanor — humble, calm, reserved — was in stark contrast to the hope he generated in a city looking for a savior.
What the city got, Edmunds said, was a failed leader who padded the payroll with family and friends and lived “the high life” on the city who “chose to waste his talents on personal aggrandizement and enrichment when he had potential to do so much for the city.”
Longtime Oakland County Executive L. Brooks Patterson was more blunt: “The guy was intelligent, charismatic and greedy as hell,” Patterson said via Twitter. “This is the end of a long Greek tragedy.”
Kilpatrick, 43, now heads to federal prison, pending appeal, until he’s a senior citizen, a final stop in long, steady descent from the days when he was a rising star in the Democratic Party. In less than five years, Kilpatrick has gone from the mayor of a major American city to a twice-convicted felon forced to resign for lying under oath and, on Thursday, sent to prison for stealing from taxpayers.
“I hope a sentence like this is a real eye opener for people violating the public trust,” McQuade said.
Kilpatrick showed little emotion as Edmunds handed down the sentence. He frequently closed his eyes and slumped in his chair as the judge outlined her reasoning.
Even though he admitted he “really messed up,” Kilpatrick denied the most damning charges: That he operated a complex racketeering enterprise centered on lining the pockets of himself and contractor Bobby Ferguson. Though prosecutors estimated the loss at $9.6 million, Edmunds put the loss at a more conservative $4.6 million.
Kilpatrick, though apologizing for his behavior in general, said he wasn’t a thief.
“I’ve never done that, your honor,” Kilpatrick said.
Trial ran 6 months
Throughout the six-month trial, dozens of witnesses detailed a City Hall in which Kilpatrick was the center of a massive scheme to steer contracts to Ferguson, and who frequently hit up other city vendors for cash, free flights and a lifestyle well beyond his mayoral salary. The scope of the crimes sickened at least one of the jurors. Ferguson, convicted on similar charges, will be sentenced today by Edmunds.
And while Edmunds acknowledged it is almost impossible to quantify the complete toll Kilpatrick’s behavior had on the city, she said it was clear the victims were the residents of the city that elected him.
Beyond money, Kilpatrick’s actions stunted the city, leading some to leave government rather than participate and ethical vendors to go elsewhere. Kilpatrick, the judge said, “bred cynicism and apathy among those who might otherwise have been advocates for city growth.”
The most dramatic moments of the hearing came when Kilpatrick, who did not testify during the trial, slowly strode to a podium and delivered his first formal remarks of the case.
Over more than 20 minutes, Kilpatrick was philosophical, insightful and defiant. He admitted that he ended up “hating” his dream job —mayor of Detroit — and cloaking his fears with “false confidence” that others took as arrogance.
“All I wanted in my life was to be mayor. I didn’t want to be president, I didn’t want to be governor. I went to law school but I didn’t want to be a lawyer,” Kilpatrick said. “I wanted to be mayor of Detroit.”
“I want the city to heal. I want the city to process. I want the city to be great again. I want the city to have the same feeling it had in 2006 when the Super Bowl was here,” Kilpatrick said. “Everyone felt like this was their town.”
Staff writers Tom Greenwood, George Hunter, Serena Daniels, Jim Lynch, Oralandar Brand-Williams, and Holly Flickinger contributed